Phenotypic variation is ubiquitous in biology and is often traceable to underlying genetic and environmental variation. However, even genetically identical organisms in homogenous environments vary, suggesting that random processes may play an important role in generating phenotypic diversity; indeed, stochastic effects in gene expression can generate beneficial phenotypic variation in microbes. Few studies have explored the impact of stochastic fluctuations in gene expression on phenotypic variation and cell fate decisions in multicellular organisms. For the last ten years, the van Oudenaarden laboratory has intensively studied stochastic gene expression in microbial systems and more recently started to apply these concepts to multicellular organisms and stem cels. One of the major lessons learned from our work and others is that microbial systems tend to exploit stochastic gene expression by introducing phenotypic diversity into the population without the need to resort to irreversible genome modifications. This non-genetic variability can increase the fitness of the population particularly in fluctuating environments. This makes sense for microbes continuously challenged by unpredictable environments. However it is an open question whether stochastic gene expression benefits or hinders decision-making by cells in a developing organism. The overarching goal of this proposal is to understand how stochastic gene expression is controlled, or utilized, during development and stem cell differentiation using the nematode worm Caenorhabditis elegans and murine embryonic stem cells as experimental model systems. During the last three years at MIT my laboratory has developed an expertise in working with these experimental model systems. My laboratory will use a combination of quantitative experiments, theoretical and computational approaches, and the development of novel technology to develop a quantitative understanding of the origins and consequences of stochastic gene expression during development and stem cell differentiation.